The two parties may set up a data center in Northwestern China’s Ningxia Autonomous Region and an operation center in Beijing. Although the specific operation model between the two companies is not disclosed, they may refer to the model adopted by Microsoft’s Windows Azure when entering Chinese market.

In November last year, Microsoft rolled out its enterprise cloud services Office 365 and Windows Azure in China through its partner 21Vianet Group, a large carrier-neutral internet data services provider. Microsoft authorizes relevant technologies to 21Vianet and the latter is responsible for operation of these two services. This cooperation model enables Microsoft to avoid the obstacles in applying a telecom operation license in China.

AWS recorded rapid development in recent years. The valuation of AWS is expected to surpass $50 billion by 2015, according to an analyst with U.S. investment Bank Evercore Partners.

The entry of AWS will heat up the competition in the already-crowded Chinese cloud market packed with domestic players like AliCloud, Baidu Cloud, Sina Cloud and Ucloud.

The key factor for AWS to tap Chinese market is localization, according to Ji Xinhua, CEO of domestic cloud computing startup Ucloud. He added that product development, technical support and marketing are the most urgent issues that AWS has to tackle.

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